BUILD A NEW NEUE KLASSE
‘BY 2023 WE WILL HAVE AN EV IN EVERY KEY SEGMENT, FROM COMPACT CARS TO ULTRA LUXURY’
Reaching for a comforting squeeze of the past while contemplating the seismic changes of the near future is nothing new in contemporary car making. But BMW is reaching and squeezing on a different scale to most. Where the likes of Honda and Renault looked back and drew inspiration for a couple of individual cars to create the cute E and the R5 (see page 86), BMW is looking to an entire generation of machines, the Neue Klasse of the ’60s and ’70s .
Why? Because so much that made, and continues to make, BMW great (including the combustion engine) is going out of the window. After a bumpy start, Munich’s electrification starts here, in earnest. With the i3 and i8, BMW went electric early, got burned, and returned to the Tesla-led conflagration with understandable caution (see the conspicuously less innovative iX3). But that reticence is a thing of the past.
‘In 2021 our electric car sales will grow by more than 75 per cent compared to last year, and 2023 will be a key year, with 13 fully-electric models on sale,’ CEO Oliver Zipse told the world in March. ‘Others focus on niches. We, on the other hand, are taking a targeted approach across all segments. By 2023, we will have at least one fully electric model in every key segment, from compact cars to ultra-luxury.’ (Right now, BMW has just two EVs on sale; the veteran i3 and the iX3, with the iX imminent.)
And this is just phase one. Phase two of Zipse’s vision promises a period of revolution familiar to students of BMW history. Half a century ago the company re-invented itself with the Neue Klasse, an elegant, technically advanced and fun-to-drive generation of compact sports saloons that laid the foundations for the car maker we know today. Those cars brought hope. When the Quandts gained control BMW was in a perilous state, with insucient profit in either its cars or its motorcycle-engined ⊲
runabouts. With their speed, style and modernity, the Neue Klasse made BMW relevant, vital and, crucially, profitable.
In 1962, the 1500 (the car pictured here) helped the Bavarian maker break even. With the 1800 in ’63 there was profit – nearly 150,000 were built. For BMW these cars were little less than The Big Bang; Creation. They defined the blueprint Munich would rely on for decades to come. From the first M3’s gutsy four-cylinder engine to the new M3’s delicious balance, there’s been a little Neue Klasse in every BMW since.
‘The electromobility growth curve will continue to climb between 2025 and 2030,’ continues Zipse. ‘Our electric cars will see average growth of more than 20 per cent per year during this period. To this end, we will be launching a radically new product offering in 2025, the Neue Klasse. The name is familiar, of course. BMW made a similarly radical change in its product direction once before, in the early ’60s, and experienced an unprecedented upswing for the coming decades. Back then, it was about our determination to change things. We are being just as bold and just as radical again today.’
On the surface at least, BMW doesn’t look in need of radical change. If net profit was down (to €3.9bn) in 2020, there was plenty of good news. Sales in the second half of the year made it the strongest six-month period in the company’s history, with 1.36 million vehicles sold (2.3 million for the year), while BMW’s ongoing cost management yielded a reduction in fixed costs of almost €1bn. And if worldwide sales slumped a little, there were several standout performers, notably increased sales for the profitable 7-series, 8-series and X7, and best-ever sales for M division (up 5.9 per cent year on year). Sales of BMW’s electrified (battery-electric and plug-in hybrid) cars increased 31.8 per cent. All this while upping its R&D ratio to 6.3 per cent, which represents a juicy expenditure of nearly €6.3bn.
So why the upheaval? Myriad reasons, from CO2 targets to shifting legislation, competitor threats (Tesla primarily; its radical approaches to every aspect of the business of building and selling cars continue to point the way) to untapped potential, not least on the battery-electric front. If BMW’s battery-electric sales are growing, and fast, what could it achieve with a battery-electric line-up worth getting excited about?
Which is where the Neue Klasse 2.0 comes in – and where a good chunk of those R&D billions is headed. Zipse: ‘We see this Neue Klasse as a combination of a new IT and software architecture, a new generation of electric drivetrain and battery technology, and a new level of sustainability. It will be our global product offering for the markets of the future. For us, the Neue Klasse forms the nucleus of rethinking the car from the ground up. We are liberating ourselves from today’s segments and architectures. We are revolutionising the underlying logic of our product offer.’
The iX SUV and i4 are the first fruit of Munich’s new direction. Both go on sale this year and promise much, from e£cient and punchy drivetrains to new electronics and software. In fact, so excited is BMW about the i4 that it released details months ahead of schedule.
Are we excited? We are; cautiously. The i4 promises to do for affordable EVs what the Porsche Taycan has done for the premium end of the market, namely blend a reassuringly traditional badge with an engaging driving experience and near-parity with Tesla (if not on range then on connectivity and convenience features) to deliver strong sales. More powerful i4s will offer 523bhp, all-wheel drive and 0-62mph in 4.0sec, together with a range figure – 363 miles – that eclipses even the £50k Tesla Model 3 Long Range. Just.
Back to the future? Where we’re going we don’t need, well, many of the qualities that made the first Neue Klasse a success. But to be relevant in 50 years’ time BMW will need the same spirit, and the same success.
IN 1962, THE 1500 HELPED THE BAVARIAN MAKER BREAK EVEN
GIGAFACTORIES
Henry Ford knew that scale was the only way to make a ordable cars and retain a profit margin. Tesla is working to do the same with the electric car and lithiumion battery manufacture. Its Gigafactories in Texas, Shanghai and Berlin promise to reduce costs and boost output.
BMW is investing heavily in its Dingolfing, Regensburg and Leipzig plants, readying them for the electric push. As Zipse says: ‘Even our oldest plant is going electric.’ In the UK, the Hams Hall engine site will be ‘a modern, digitised and flexible vehicle assembly facility’ by 2026.
VERTICAL INTEGRATION
The likes of Tesla and Lucid do almost everything inhouse, whereas traditional car making combines parts from suppliers with some in-house manufacturing – ‘a Frankenstein approach’, as Lucid’s CEO puts it. When e ciency (range) is king, bespoke software and hardware solutions have so far given Silicon Valley’s approach the edge.
With battery, motor and power electronics the new key technological battlegrounds, the German establishment is pouring R&D resource into both evolving the lithium-ion battery and developing alternatives. Tied to that is a move away from traditional approaches. Zipse: ‘We are liberating ourselves from today’s architectures.’
A CONNECTED ECO SYSTEM
Team Musk was a pioneer of over-the-air updates and using data from every Tesla on the road as an R&D tool. It’s one reason Autopilot was so advanced, so soon.
BMW et al paid lip service to connectivity for a number of years, but that’s changed: iDrive 8.0 (overleaf) leaps in power. Data is king, and Munich knows it.
COMPANY OWNED RETAILERS AND CHARGING NETWORK
Tesla blazed a trail here, adamant a franchised dealer couldn’t do a proper job of selling EVs. Its Supercharger network, while expensive, was also a masterstroke.
VW dabbled with the agency model for the ID.3. BMW initiated the Ionity joint-venture, but the likes of Porsche announcing its own chargers is a worry. ⊲